Cramer: 4 Shorted Stocks Emerging From the Doghouse

CNBC's Jim Cramer shares his thoughts on stocks that are proving short-sellers wrong.

With the market rally pushing stocks ever higher, short sellers are being squeezed, even in names that many had left for dead. CNBC's Jim Cramer outlined why four underloved names are now dangerous for those betting on a drop.

Perhaps the poster child of beat-down stocks, Groupon has gone from "a darling to a dog to a dead dog. It's now back to being a dog," Cramer said Thursday on "Squawk on the Street."

However, the company's strategy is shifting to mobile and local, which now generate half of its business and is growing. Despite weakness overseas, the company's cash holdings are also attractive for investors, Cramer said.

(Read More: Analysts Raise Groupon Price Targets)

Green Mountain Coffee has also been on the radar of short sellers, but the stock was up sharply in early trading Thursday on the heels of an expanded deal with Starbucks and positive earnings guidance.

"All you needed to know is that sales increases were back and the numbers were spectacular," Cramer said. "This has become Starbucks' partner instead of Starbucks' enemy. There is a lot of opaque nature in the Starbucks deal, but it's good for both."

"If it's true, then Barnes & Noble has pulled it off," Cramer said, but urged caution. "I don't know the terms, because it's too bountiful. There is a 36 percent short position in BKS, and you must cover if the deal is true. You just have to, there is no choice."

Electric car maker Tesla also rallied in early trading Thursday, after Consumer Reports awarded a near-perfect score to the flagship Model S sedan. The company also reported its first quarterly profit, beating production and delivery estimates, and issued positive guidance for 2013 sales.

"This was an amazing conference call," Cramer said, noting that the conference call revealed that 25 percent of those who test drive the Model S purchase one.

"It was the kind of call that makes you say, 'I'm short the stock, run me over with a Tesla, I cannot take the pain,'" he said. "Consumer Reports is going to take the 21,000 in sales that Tesla said they were going to do... They could double that."